Robinhood Markets Inc. has finalized a share repurchase settlement value $605.7 million with the USA Marshal Service, based on an organization announcement made earlier right now and CNBC report. The deal entails the acquisition of 55.3 million shares at $10.96 every, beforehand owned by Sam Bankman-Fried’s Emergent Constancy Applied sciences. The transaction has obtained approval from the U.S. District Courtroom for the Southern District of New York
Monetary Implications
The $605.7 million deal represents a big monetary transfer for Robinhood, which had initially disclosed its intention to repurchase the stake in February of this yr. The corporate’s board had licensed the pursuit of buying most or all the inventory at the moment.
Market Response
Following the announcement, Robinhood’s inventory (HOOD) skilled a 3.31% enhance, closing at +0.36. This implies that the market has largely responded positively to the information, though it stays to be seen how this can have an effect on the corporate’s long-term valuation.
Authorized Context
The approval from the U.S. District Courtroom for the Southern District of New York provides a layer of authorized validation to the transaction. It additionally closes a chapter on the involvement of Bankman-Fried’s Emergent Constancy Applied sciences with Robinhood, following the previous’s chapter safety submitting final yr.
Background
In Could 2022, Bankman-Fried had acquired a 7.6% stake in Robinhood, amounting to over 56 million shares valued at almost $482 million.
In line with a Reuters report dated January 4, 2023, U.S. officers had been within the strategy of seizing greater than $400 million value of Robinhood shares linked to FTX.
Then the shares in query had been seized and transferred to the U.S. authorities’s custody following the chapter safety submitting by Bankman-Fried’s FTX and Emergent Constancy Applied sciences final yr.
Robinhood’s board had permitted a plan to repurchase the stake, as confirmed of their fourth-quarter report revealed on February 8, 2023.
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